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PIPELINE DEVELOPMENT 

The original project of this pipeline was proposed by the Russian oil company Yukos in 2001 as an independent oil pipeline. The project proposed to build a pipeline from Angarsky, where Yukos operated a refinery, to Daging in northern China. At the same time, Transneft proposed an alternative project to pipe oil from Taishet in Iruktsk Oblast to the Far East port Kozmino near Nakhodka. In May 2003, the Russian Government decided to combine these projects and that Transneft would be in charge of the pipeline, while Yukos would supply the oil. On 29 May 2003, Russia and China signed an agreement on construction of the pipeline. On 31 December 2004, the Russian government approved the construction of the pipeline from Taishet in East Siberia to Pervoznaya in the Pacific region.

Construction of the pipeline started in April 2006. On 4 October 2008, the section between Taishet and Talakan was launched in a reverse to pump oil from Surgutneftegaz owned Alinsky deposit. The first stage of the pipeline was completely laid in May 2009 and the whole first stage was reversed in December 2009. The terminal at Kozmino was inaugurated by Russian prime minister Vladimir Putin on 28 December 2009. Construction of the second stage from Skovorodino to the Pacific Ocean started after launch of the first stage In meantime, oil was transported from Skovorodino to Kozmino by railway The second stage was inaugurated on 25 December 2012.In June 2009, Russia and China signed a deal to built the spur pipeline to China by which Russia supplies China with 15 million tonnes of oil (300,000 barrels per day (48,00.0 m3/d)) each year for 20 years in exchange for a loan worth US$25 billion to Russian companies Transneft and Rosneft for pipeline and oil fields development. Construction of the spur to China started in the Russian territory on 27 April 2008 and in Chinese territory on 18 May 2009. The 64 kilometres (40 mi) long section from Skovorodino to the Amur River on Russia-China border was built by Transneft and the 992 kilometres (616 mi) long section from Russia-China border to Daqing was built by the china petroleum corporation . It was completed in September 2010. On 1 January 2011, Russia said it had begun scheduled oil shipments to China.

DETERMINING  MARKET INTEREST AND PUBLIC ANNOUNCEMENT

To gauge the level of market interest, Michurinsky Refinery, open season is held for 1-2 months, giving potential customers an opportunity to enter into a nonbinding agreement to sign up for a portion of the capacity rights that will be available. If enough interest is shown during the open season, the sponsors will develop a preliminary project design and move forward. If not enough interest is evident, the project will most likely be dropped or placed on indefinite hold or a new channel can be open.

TIMING AND STEPS FOR NEW A PROJECT

Pipeline construction is usually completed within 18 months and sometimes in as little as 6 months. Construction can be delayed because additional time may be needed to acquire local permits from towns and land-use agencies located along the proposed construction route.

An interstate natural gas pipeline construction or expansion project takes an average of about three years from the time it is first announced until the new pipe is placed in service. The project can take longer if it encounters major environmental obstacles or public opposition.

A pipeline development or expansion project involves several steps:

  • Determining demand/market interest
  • Publicly announcing the project
  • Obtaining regulatory approval
  • Construction and testing

EXPANSION AND DEVELOPMENT OPTIONS

Options for creating additional pipeline capacity include:

  • Building an entirely new pipeline
  • Converting an oil or product pipeline to a natural gas pipeline
  • Adding a parallel pipeline along a segment of pipeline, called looping
  • Installing a lateral or extension off the existing mainline
  • Upgrading and expanding facilities, such as compressor stations, along an existing route. This option is usually the quickest, least expensive, and has the least environmental impacts.

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